When government deficit spending occurs during a period of economic recovery with 3-4% growth and near-full employment (as in 2024 US), it destroys the government's fiscal space for future contractions and creates inevitable monetary destruction through inflation, higher taxes, and lower real wages in the future, unlike deficit spending during recessions which may be justified on Keynesian grounds.
causalpending
Speaker
Danielle LabalEvidence Quote
“if government...in a huge recovery...with the economy already booming...massively increase government spending...destroying the fiscal space...in future more taxes less real wages less growth and certainly more inflation”
Created: 8/11/2026, 7:14:28 AM
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